A transaction-tax liability is induced by an individual commercial transaction, such as the sale of a good, or the purchase of a service. Typically, the transaction tax is a certain percentage of the price of the good or service. Normally, it is collected by the vendor or service provider, who pays the accumulated transaction tax at certain time intervals to a tax authority (for the sake of simplicity, the following description only mentions the purchase of goods, but it is likewise directed to the provision of services etc.).
Throughout the world, there are many different transaction-tax regulations. Some countries, such as the United States, have a ‘sales and use’ tax system, in which, if a product is manufactured and sold in a supply chain, all transactions are non-taxable re-sales until a final retail sale to an end-user, which is taxable (unless the end-user can claim a tax exemption). Thus, no tax is applied to a product until it is sold at retail. In a value-added tax system (as exists, for example, in most European countries) in a supply chain the transaction tax in a single individual step corresponds to a percentage of the value added in this step, i.e. to the difference between the amount of money the vendor receives for the sold product and the taxable amount he/she had to spend in order to manufacture or provide the good. In most of the countries the “added value” is not determined in individual transactions, but rather in a cumulated manner; in other countries, however, it is determined in individual transactions.
Furthermore, in many countries, such as the United States and Argentina, the transaction tax is split up into different fragments for different regional authorities, for example in state taxes, county taxes and city taxes, such as in the USA, or in different transaction-tax types, such as IVA, Percepcion, Surtax, and GIT in Argentina (wherein Percepcion and Surtax are exclusive tax types). Such tax fragments are also called “taxation levels”. In other countries, such as France, the transaction tax is unitary (e.g. only to be paid to the French State); in other words, there is only one “taxation level”. There are different rates in different countries and smaller regional units, such as states, counties and even cities, which may enter in a combined way in the different taxation levels. The tax rate may depend in a way specific for the country, state, etc. on the place of business of the vendor, the location of the buyer, on the origin and/or the destination of the good. It may depend on the kind of good, the type of transaction, the legal status of the vendor or buyer, etc. Moreover, the requirements for transaction-tax related bookkeeping, reporting and the form and period of tax declarations to the tax authorities generally vary from country to country, too.
Consequently, for enterprises that are active in different countries and states, a great deal of time and trouble is needed to fulfill the transaction-tax requirements in an efficient way.
Computerized systems have been designed which enable enterprises to fulfill their transaction-tax liabilities in a computer-assisted way. There are already hundreds of different transaction-tax software solutions worldwide. In one type of solution, a business application, such as an enterprise resource planning (ERP) application, for example, the product R/3 by SAP, also enables the user to deal with the transaction taxes. Another type of solution is a specialized application for transaction-tax calculation and/or reporting, such as “TaxWare”, “Sabrix”, “Vertex” and “Datev”. Further examples of transaction-tax software solutions are disclosed in U.S. Pat. No. 5,335,169 assigned to DSI, U.S. Pat. No. 5,987,429 assigned to SUN Microsystems Inc., U.S. Statutory Invention Registration No. H1,830 assigned to The Dow Chemical Company, International publication No. WO 01/16850 A2 (Applicant: Andersen Consulting, LLP), International publication No. WO 01/35678 A2 (Applicant: ESALESTAX.COM), International publication No. WO 01/41552 A2 (Applicant: Taxware International, Inc.), International publication No. WO 01/97150 A1 (Applicant: Dryden Matrix Technologies, LLC) and Sabrix: TaxBay Architecture Guide, Version 3.0, Jul. 25, 2001.
Many of the known solutions do not provide global coverage. Consequently, in practice, enterprises with worldwide coverage rely on a variety of different transaction-tax software applications, specializing in certain countries or regions all over the world. Since the different solutions are embedded in more comprehensive business solutions, or, in the case of specialized transaction-tax solutions, use their individual data schema, the cost for configuring, maintaining and operating such a variety of different solutions is considerable.